The latest Haver Analytics study shows that the share of housing starts consisting of five-or-more unit buildings topped 39 percent last month -- the highest since February 1974. Researchers say part of the gain in April was because of weather, as multi-unit starts increased in both the Midwest and Northeast. Many economists, though, recognize something more fundamental going on beyond a catch-up in demand. Steve Blitz, chief economist at ITG Investment Research, remarks, "There are any number of factors behind this move to closer quarters: Baby Boomers tired of paying for lawn care; the demand for shorter commutes; and young people with credit good enough to pay high rent, but not quite so good to afford a down payment and qualify for a mortgage." Ted Wieseman of Morgan Stanley concurs, He expects tight mortgage credit availability will drive "a historically disproportionate share" of new household formations into rental housings and support multifamily starts continuing to be a "well above historically average" share of housing starts.

Led by multifamily housing, U.S. home building surged 13.3 percent last month compared to March. The Commerce Department data revealed that groundbreaking on single-family houses bumped up just 0.5 percent, while starts on multifamily properties with five units or more spiked almost 43 percent. Similarly, applications for building permits -- an indicator of future activity -- inched up 0.3 percent for the single-family market but increased almost 22 percent for the multifamily niche. "The real loss in power in the construction side of the economy is the single-family side," said National Association of Home Builders chief economist David Crowe. "The multifamily component of our industry is virtually back to where it was before the collapse. The single-family is only halfway back." The single-family market is suffering as the critical first-time buyer population, weighed down by unemployment and student loan debt, is finding it challenging to save up a down payment or qualify for mortgage financing.

Economists Examine What's Ahead for Real Estate: The Good, the Bad, the UglyDigested From "The U.S. Economy: Good, Bad, or Ugly? Economists Examine What’s Ahead for Real Estate" RealEstateRama (05/16/2014)

Economic positives currently outweigh negatives, reported several real estate economists at The Counselors of Real Estate's Midyear recent conference in Austin. The three-day event brought together such professionals as K.C. Conway, chief economist – USA, Colliers International; Dr. Mark Dotzour, chief economist for the Real Estate Center of Texas A&M University; and Econsult Solutions Inc. President Richard Voith. The consensus: for most of the United States, real estate continues to recover and opportunities exist across many sectors. For one, the influx of population into many of the country's major metro centers is creating more service-sector job opportunities. In New York City, for instance, there are 1.3 million more residents today than in 1980. Conway states that real estate opportunity always follows population, and that Baby Boomers are still driving real estate trends as they move into more densely populated cities to be near airports, healthcare, and activities. On the downside, panelists cited the trend toward urban living as causing concern for some suburbs where housing is not selling rapidly. More and more young professionals are indeed locating in cities, and many of their parents have also moved on to either cities or amenity-laden active-senior communities. Voith further pointed to lagging employment opportunities in the public sector as an example of what is "bad" right now. While not taking a political position, the various panelists noted that government officials have deferred action on a number of significant economic issues and have fostered a "no compromise" culture on Capitol Hill that will likely only get more problematic.

The average apartment rent has passed $1,000 a month in Minnesota's Twin Cities, despite the fact that optimistic builders continue to flood the market with additional rental units. Builders completed more than 1,000 new apartments across Minneapolis and St. Paul in the first quarter. This caused the vacancy rate to inch up to 2.7 percent, states Minneapolis-based Marquette Advisors. Even so, apartment vacancies continue to hover at historically low levels, and for the first time, average monthly rents across the metro area eclipsed the $1,000 threshold. NAI Everest President Gina Dingman comments, "We've been able to absorb the units even better than some people might have predicted. There is confidence in the market." In the Twin Cities, a total of 1,011 apartments were added to the rental pool from January through June -- 757 in Minneapolis and 254 in St. Paul. Young professionals are moving to the market for jobs. Meanwhile, Baby Boomers are selling their large suburban homes and looking for smaller digs closer in. A number of multifamily housing developers are focusing on downtown Minneapolis, which ranked as the region's most active area during the first quarter. There continues to be speculation about the depth of the Twin Cities' rental housing market. Nevertheless, the region remains one of the healthiest in the country and has even been attracting institutional investors. Analysts expect another uptick in vacancy rates in the coming months as more than 1,300 rental apartments are due to hit the market between now and Dec. 31.

Where Are the Most Affordable Apartments in the Country?Digested From "Macon Apartments Ranked Second Most Affordable in Country" Macon Telegraph (05/17/14) Morris, Linda S.

The online apartment listing company www.apartmentguide.com conducted a nationwide survey last month based on 20,000 apartment communities to determine what are the most affordable housing markets in the country. Researchers looked at the median price per square foot in metro areas with at least 30 properties and determined that the national median price for an entry-level studio or one-bedroom apartment is $769 a month. The top market was found to be Columbia, Mo., followed by Macon, Ga. Entry-level apartments that cost $769 a month in Springfield have a median square footage of about 1,059, according to the study. For the same money in Macon, the median square footage is about 1,054 square feet. On the other end of the spectrum, someone who rents an apartment in the San Jose, Calif., area would get a 267-square-foot apartment for $769 a month. This marks the first time the company has conducted this particular survey, reports Steve Harper, interactive content producer for RentPath, which owns apartmentguide.com.

First-time home buyers have been sitting out for much the housing turnaround, which has been somewhat muted as a result of their lack of participation. Experts say young Americans still value homeownership; however, they are being influenced by economic circumstances and societal trends. Financially, they are handicapped by a high rate of joblessness, low savings rate, poor credit scores -- the worst, in fact -- and a mound of student loan debt. "The majority of younger renters report having insufficient assets to cover a 5 percent down payment plus closing costs on a typical starter home," according to Fannie Mae strategic planning analyst Sarah Shahdad. At the same time, young adults are putting off marriage and child-rearing, both of which often lead to home purchases. "Because people are marrying and having kids at an older age, many young people might spend more years renting apartments and living in cities, before moving to the suburbs," noted Trulia chief economist Jed Kolko.

How High Did Colorado Springs Rents Rise in the 1st Qtr?Digested From "Report: Apartment Rents Higher in First Quarter" Colorado Springs Business Journal (05/12/14) Moix, Cameron

According to a report by the Colorado Division of Housing, average apartment rents in the Colorado Springs metro area increased on a year-over-year basis for the seventh consecutive quarter for the three-month period ended March 31. Average rents in the area climbed 4.3 percent from $787 during the same three-month period of 2013 to $822. The report was released Monday in partnership with the Apartment Association of Southern Colorado. Division of Housing economist Ryan McMaken states, "Rent growth has continued with a slowly-improving job market in the region, and as vacancies continue to be scarce in most submarkets." Each region in the metro area experienced similar growth with the exception of Colorado Springs' Northwest region. The lowest average rates were found in the Security/Widefield/Fountain region where average monthly rents were $627. Researchers further note that Colorado Springs' apartment vacancy rates also declined from January through March from 5.6 percent to 4.9 percent.

Maryland-based Walker & Dunlop (W&D) recently secured a $278 million Fannie Mae credit facility for Milestone Apartments, a Canadian REIT listed on the Toronto Stock Exchange. The REIT's portfolio is comprised of 55 garden-style apartment communities located in 11 cities throughout the Southeast and Southwest U.S. W&D originally structured this facility for the REIT nine years ago. It added additional assets in 2008 to the facility. The full-term, interest-only facility is made up of a mix of fixed and variable rate notes with staggered maturities collateralized by 20 apartment communities in five states -- Arizona, Florida, Georgia, Tennessee, and Texas.

The United States Department of Agriculture (USDA) confirms that it has contracted Sperry Van Ness/Interstate Auction to auction nine apartment communities spread throughout Michigan on June 18-19. The various communities are located in such markets as Beaverton, Clinton, Dundee, and North Branch. All bidding will be conducted online at www.MichiganUSDAApts.com. Each property will have a couple of scheduled open house/inspections with guided tours.

In the last year, a total of eight apartment communities have opened in Boston and Cambridge offering more than 2,000 luxury apartments. With another 1,000 or so in the pipeline, competition for high-rent residents will only intensify. This means that luxury apartments owners and managers will have to do more than just offer high-end appliances and prime addresses to beat the competition. The article lists the six coolest and most unusual amenities showing up at area luxury apartment communities. Chief among them are multi-purpose fitness spaces. The Victor, a luxury apartment community in Boston's North Station, offers residents a space where they can organize pickup basketball, practice yoga, or host a dodgeball or volleyball tournament. Rooftop pools are also in demand. The Kensington’s sky deck at the edge of Downtown Crossing and the Theater District has one of the best. Atmark Apartments in Cambridge boasts a full-size bocce ball court in one of its courtyards.

One of the most cutting-edge amenities to be offered are charging stations for electric cars. The Wyeth, a boutique apartment community near Cambridge's Alewife section, offers what it calls a "juice bar" for electric cars at no cost. Several local properties offer special "community rooms," which are communal spaces that boast everything from chef's kitchens to pool tables to big-screen TVs. Finally, the Watermark Kendall West in Cambridge will soon debut its sky terrace with sweeping views of Boston's skyline and the Charles River.

Berkshire Income Realty Inc. has appointed Chuck Leitner, already president of the Berkshire Group affiliate, as its new president and board chairman. He is succeeding David C. Quade in the former role and Douglas Krupp as the latter. Neither Quade nor Krupp will continue serving on the apartment REIT's board. Quade, though, is staying on as an executive vice president. Leitner took the helm at the Berkshire Group last October. Prior to that, he served as chairman and CEO of the ULI Greenprint Center for Building Performance. Earlier in his career, he spent over two decades at RREEF, Deutsche Asset Management's global real estate investment management business, where he held such posts as global head and CEO.

Building owners and managers are often faced with the daunting task of cleaning up after storms and restoring damaged landscapes. Such jobs often require more than a few garbage bags, some rakes, and traditional lawn equipment. Properties that are dealt a heavy blow by Mother Nature need to first take a step back and formulate a strategic plan for their cleanup. The article offers six tips for restoring storm-damaged landscapes. First, prioritize the cleanup and identify potential hazards. These can range from unstable trees to downed power lines. Tip two, use extreme caution when cutting or removing trees. Three, determine if standing trees are safe or hazardous. This, of course, may require the owner or manager to call in an expert.

Tip four, be sure to prune all smaller trees, shrubs, and perennials affected by storm damage. Again, due to the fact that different varieties of plants have different abilities to recover, it is best to call in an expert and get his/her opinion before deciding what stays and what goes. Five, inspect the property's exterior landscape for drainage issues. Finally, take great care in handling and removing standing water. The article's author writes: "Standing water resulting from heavy rains and flooding can be a health hazard. In extreme cases, water from a flooded building that saturates the landscape may contain fecal material from overflowing sewage systems and agricultural and industrial waste."

HUD, the FHA, and Fannie Mae have announced their support to expand Green Preservation Plus -- which aims to preserve quality affordable multifamily housing via the reform of energy and water projects that make them more efficient. Owners and/or buyers of affordable multifamily housing properties can use Green Preservation Plus to buy or refinance existing Fannie Mae loans to improve the water and energy efficiency of each property. The loans distributed through this program not only provide additional loan proceeds through lower debt service and higher loan-to-value ratios but also can significantly reduce the costs of amenities at a multifamily property. Additionally, in order to fund the improvements, as much as 5 percent of the loan amount can be combined to the mortgage. Hilary Provinse, vice president for multifamily customer engagement, remarks, "We're pleased to see initial industry interest in our green financing options and to make the benefits available to a broader group of property owners and [residents]."

Which Apt. Rules Did Del. Town Ease? Which Did It Bolster?Digested From "Middletown Eases Some Apartment Rules, Strengthens Others" Middletown Transcript (DE) (05/16/14) Goss, Scott

In Delaware, Middletown town council members last week approved a series of measures aimed at encouraging the construction of new apartment communities, while helping existing apartment owners bring their rental units into compliance with town code. The first measure approved by reduces the impact fee charged on newly-erected apartments -- fees that are based on the estimated daily sewer flow that used by each rental unit. Previously, that usage had been set at 250 gallons per day, which was equal to the estimated usage charged to townhouses. That estimated daily usage has been reduced to 110 gallons under an amendment approved last week. In addition, Middletown council members approved a one-year grace period for the owners of unregistered apartments to bring their units into compliance with town permitting requirements. The town currently requires the owner of any new rental apartment to pay their past due town bills, fees, and assessments prior to town officials scheduling a $50 inspection. If an apartment passes inspection, each unit will be registered for three years. The owner of an unregistered apartment faces a $150 fine, along with a $10-a-day fee for each day the apartment is not brought into compliance. The new grace period means apartment owners and managers would not be subjected to those fines if they bring their existing unit into compliance. However, it only extends to one apartment per owner.

The industry event of the year—the 2014 NAA Education Conference & Exposition, June 18-21 in Denver—is more than just an opportunity to broaden your network and leverage multifamily housing knowledge to take your career to new heights, it’s also an unparalleled chance to hear from the most sought-after and inspiring orators from the worlds of business and entertainment.

Join international film and TV star, activist and author Michael J. Fox on Thursday, June 19, as he shares his remarkable story, “A Funny Thing Happened on the Way to the Future.”

Although a scheduling conflict is preventing Daymond John from appearing in Denver, NAA is thrilled to announce Kevin Harrington, Chairman and Founder of As Seen On TV, Inc., will be taking the stage with Barbara Corcoran, Co-Host of ABC’s hit series “Shark Tank,” during the General Session on June 20.

Corcoran, who started a real estate business with a $1,000 loan, subsequently built the largest and most successful real estate business in New York City. Harrington served as an investor “Shark” on “Shark Tank” with Corcoran, and is widely acknowledged as a pioneer and the principal architect of the infomercial industry.

On June 21, Alex Sheen, the founder of because I said I would, headlines NAA’s Awards Celebration Breakfast. Sheen will speak to NAA attendees on how promises can help increase goal attainment rates, encourage volunteerism and improve a culture of accountability in your group.

Act Now! Register by June 6 to take advantage of up to $150 of savings on your investment.

Combining both the Apartment Revenue Management Conference and the NAA Green Conference into a comprehensive retreat for asset managers charged with creating new value for their investors, the new name reflects the important role that revenue management plays in professional apartment management.

Have something to say? Visit the conference website for full details on submitting your proposal. Then, make sure to register today and be first in line for the information, insight and answers to questions necessary to boost your bottom line.

The National Apartment Association (NAA) is America's leading advocate for quality rental housing. NAA's mission is to serve the interests of multifamily housing owners, managers, developers and suppliers and maintain a high level of professionalism in the multifamily housing industry to better serve the rental housing needs of the public.

Event Highlights

Responding to the need for leadership training within the apartment industry, NAAEI has partnered with Dale Carnegie Training to deliver a world-class program called the NAAEI Leadership Experience....